Open AccessTHE USE OF THE STATEMENT OF CASH FLOWS BY JAPANESE SMES
Author(s) -
Katsuyoshi Okabe,
Martha G. Suez-Sales
Publication year - 2021
Publication title -
eurasian journal of business and management
Language(s) - English
Resource type - Journals
ISSN - 2148-0206
DOI - 10.15604/ejbm.2021.09.04.004
Subject(s) - cash flow statement , financial statement , accounting , business , statement (logic) , cash flow , premise , government (linguistics) , statement of changes in financial position , perspective (graphical) , financial statement analysis , capital (architecture) , cash , audit , marketing , finance , financial analysis , financial accounting , accounting information system , political science , linguistics , philosophy , archaeology , artificial intelligence , computer science , law , history
The purpose of the study is to analyze the usage of the statement of cash flows (SCF) by Japanese SMEs from the perspective of preparers. The paper analyzes how institutional mandates have shaped organizational behavior, and how these mandates reflect the country’s social and cultural values. We analyze this premise in respect to the usage of the statement of cash flows by Japanese SMEs. The study relies on institutional theory and cultural values to help explain the results obtained from a survey questionnaire. We focus on financial reporting behavior when the SCF is a noncompulsory disclosure under SMEs general guidelines. We analyze different variables including intent to make a public offering and the number of professional accounting staff, and find firm size to be significantly associated with the recognition and production of the statement of cash flows. We believe that our findings will be useful to the Japanese government in designing SME economic guidance for capital growth to improve capabilities and ensure sustainability.